Correction to This Article
Earlier versions of this story incorrectly said that the city had no tax increases during the tenure of Mayor Vincent C. Gray's predecessor, Adrian M. Fenty. Fenty did not propose any tax increases, but he agreed to some ¿ such as on sales and cigarettes ¿ that were proposed by the D.C. Council. This version has been corrected.

Mayor Vincent C. Gray warned District residents to brace for "some very painful choices in the weeks and months ahead" during a 10-minute speech after he was sworn in Sunday before 3,500 people at the Walter E. Washington Convention Center.

Gray (D) said the $440 million deficit he inherits is one of the biggest challenges facing his administration. Mayor Adrian M. Fenty did not propose new taxes but agreed to some the council proposed. However, Gray, who ran as the anti-Fenty, said in a meeting with reporters Sunday that an increase is "pretty close to the table, maybe close to the tabletop."

The city's fiscal challenges and changing demographics regularly pit issues such as adding bike lanes and dog parks against providing day care, homeless shelters and job training for the needy. Already, Gray has softened a proposal to reduce welfare benefits after protests from low-income residents.

D.C. Council Chairman Kwame R. Brown (D), who was also sworn in Sunday, said he hopes to avoid a major tax increase, even though some of his more liberal colleagues want to raise taxes on the wealthy to help balance the budget.

"Our residents and businesses pay already-high taxes and fees in some areas. We must be wary of the consequences of adding to this burden," Brown said. "Our best intentions must be tempered with the reality of our municipal checkbook."

Gray, a 68-year-old widower, is the first council chairman in District history to be elected mayor. In a city rived with economic, racial and class divisions, Gray's campaign emphasized a message of unity. He acknowledged such divides in his inaugural address but said, "There is far more that brings us together than there is that drives us apart.

"Whether we get around by car, bus, train, foot or bike, this is one city, our city," Gray said, putting a twist on his "One City" campaign slogan.

Moving forward together

Eric T. Washington, chief judge of the D.C. Court of Appeals, administered the oath of office to Gray, who was sworn in two minutes before noon, the time by which the D.C. charter says a new mayor must take office. Dignitaries at the service included Maryland Gov. Martin O'Malley (D) and Prince George's County Executive Rushern L. Baker III (D).

From the prayers that started the festivities to the walls above the ceremonial dais to the culmination of Gray's address, the theme was "one city."

In the invocation and benediction, Cardinal Donald Wuerl carried on Gray's united-city theme by recognizing the District's divisions. "We are a people who come together out of multiple backgrounds - ethnic, racial and religious, cultural and social - with varying interests, occupations and manners of living," he said. "We ask that you continue to bless our community as we seek always to respect one another."

Former mayor Anthony A. Williams (D), who has assisted Gray's transition, said Gray should be unafraid to make difficult and potentially alienating decisions early in his mayoralty. "This is the high point here; you never have more political capital," Williams said. "It's all downhill from here."

Gray's campaign has emphasized education, unemployment, crime and fiscal health. Like his predecessors, he said he plans to pursue statehood for the District.